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External auditors give Lynchburg an unmodified opinion, flag school financial reconciliations
Summary
Brown Edwards presented the city’s FY2024 Annual Comprehensive Financial Report and issued an unmodified (clean) audit opinion while reporting one internal control finding tied to reconciliations and audit adjustments at Lynchburg City Schools amid staff turnover; federal-award testing found no compliance findings.
Chris Banta, audit partner with Brown Edwards, presented the Lynchburg FY2024 Annual Comprehensive Financial Report at the Dec. 10 work session and reported that the firm issued an unmodified (clean) opinion on the city’s financial statements and associated footnotes.
Banta said the audit covered government funds, enterprise activities (airport, water/sewer, transit) and the schools. He described the audit phases — financial statement opinion, internal-control reporting, federal-award testing, and passenger facility charge compliance for the airport. "I'm happy to report that the city received an unmodified, unqualified opinion," Banta told council.
The firm did report one internal control finding related to the schools: audit adjustments and some unreconciled balances, including cash reconciliations and self-insurance liability true-ups. Banta said the items required auditor adjustments to reach the clean opinion and attributed the condition largely to turnover in school finance positions. "When we received the audited trial balance ... certain balances weren't reconciled yet," he said. Brown Edwards will apply additional audit procedures in the next audit cycle to verify corrective actions.
Federal-award testing and compliance: Banta said Lynchburg reported about $54,500,000 of federal expenditures in FY2024 and auditors tested roughly 50% of that amount across selected programs. He said the auditors found no federal compliance findings on the grants tested, including Medicaid adoption assistance and coronavirus-related ESSER funding. The auditor also reported no control or compliance findings for passenger facility charges at the airport under FAA requirements.
Other budget context: Councilors raised questions about the city’s unassigned general fund balance, which Banta said had been budgeted at about $22 million and closed higher (approximately $40 million), representing an unspent amount above the anticipated level. That variance was described as positive that the city did not spend budgeted funds, but council members said they wanted continued oversight.
Follow-up and response: Banta said the schools have provided a thorough corrective-action response and plan to provide additional training; Brown Edwards will verify implementation in next year’s audit. Council members and staff discussed turnover in the school finance office, the role of COVID-era federal funds in staffing decisions, and the need to watch for long-term obligations funded temporarily by one-time grants.
No formal action was taken at the meeting on the audit report; auditors invited council members to follow up with questions.
